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re: Am I over thinking this...Roth v. Traditional IRA
Posted on 9/6/18 at 7:12 am to ChandlerB03
Posted on 9/6/18 at 7:12 am to ChandlerB03
Sounds like you're not eligible for ROTH If you were in 33% tax bracket in 2017 ($233,350 to $416,700) you exceeded the ROTH max allowable income which was $196,000. This year the income threshold is $199,000.
You could do backdoor ROTH though.
As other posters suggested tax rates are likely to rise in the future. However, you're personal tax rate isn't likely to be as high as it is today. I'd probably the tax benefit now since you'll probably be in a much lower bracket in retirement compared to that current income.
With your income and no 401k or pension you should also be loading up taxable accounts. If you happen to be in a low tax bracket when you withdraw you could pay zero % long term capital gains. Since you won't have taxable income flowing from 401k withdrawal or pension taxable accounts might be advantageous in your situation.
You could do backdoor ROTH though.
As other posters suggested tax rates are likely to rise in the future. However, you're personal tax rate isn't likely to be as high as it is today. I'd probably the tax benefit now since you'll probably be in a much lower bracket in retirement compared to that current income.
With your income and no 401k or pension you should also be loading up taxable accounts. If you happen to be in a low tax bracket when you withdraw you could pay zero % long term capital gains. Since you won't have taxable income flowing from 401k withdrawal or pension taxable accounts might be advantageous in your situation.
Posted on 9/6/18 at 8:31 am to TorchtheFlyingTiger
I'm actually in the 25% bracket. One you take in account federal and state rate, I pay in about 33%. Should have clarified.
"However, you're personal tax rate isn't likely to be as high as it is today. I'd probably the tax benefit now since you'll probably be in a much lower bracket in retirement compared to that current income."
This is my thought also.
"However, you're personal tax rate isn't likely to be as high as it is today. I'd probably the tax benefit now since you'll probably be in a much lower bracket in retirement compared to that current income."
This is my thought also.
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